The provincial regulator has rejected a proposal by Nova Scotia Power Inc. to burn waste wood to create electricity.

NSPI's biomass agreement with a Cape Breton mill called for enough wood — about 11 per cent of the annual provincial wood harvest — to generate power to run 50,000 homes in the province.

'The applicants came to the board with a half-baked recipe'—John Merrick, consumer advocate

The power corporation said it would cost about $1 billion over 25 years to buy this biomass energy.

In a decision released Wednesday, the Nova Scotia Utility and Review Board said it doesn't have the authority to approve an operational expense for an amount that would affect power rates for more than two decades.

The board said the project might be a good one, but expressed frustration at having too little information on which to judge its merits. For example, there was no formula on how wood-waste costs would be calculated over the life of the project.

Consumer advocate John Merrick said the board did the right thing.

"The decision of the board is a good one for ratepayers in that it has declined to approve what might be a good or what might be a bad deal," he said. "The applicants came to the board with a half-baked recipe."

Under NSPI's agreement with NewPage Port Hawkesbury Ltd., the mill in Point Tupper would burn more wood shavings and junk logs, and sell the electricity generated from it to the power corporation.

Strait Bio-Gen Ltd., a Cape Breton company, would build the biomass facility and run the project.

NewPage estimated that it would have to increase by 50 per cent the amount of wood it cuts from Crown and private lands. It said the project was sustainable and would create 150 jobs.

NSPI argued the project would go a long way in meeting new provincial rules on supplying electricity from renewable sources. If it doesn't meet these targets, the corporation could face million-dollar fines.

Too big to sustain

Opponents say the project is too big to sustain and would lead to clearcutting on public lands.

Dalhousie University professor Larry Hughes, an energy researcher, told the board that converting wood waste into electricity is wasteful. In a written submission, he said it is far more efficient to turn the waste into pellets for home heating.

NSPI doesn't need board approval to develop its biomass proposal. The outstanding issue was whether investors or customers would foot the bill.

It's now up to NSPI to decide if it wants to take the financial risk.

"In terms of next steps we will be reviewing the board's decision carefully," said Jennifer Parker, a corporation spokeswoman.

Merrick will be watching NSPI's next move.

"If they decide there is enough merit, that inherently it's a good concept, then I would hope they would be prepared to accept the risk they have to run themselves and continue to proceed with it," he said.